FHA Loan Facts
Posted by Bill True on
All About FHA Loans
FHA loans are mortgages insured by the Federal Housing Administration (FHA), and issued by lenders who qualify. However, as a popular financing option, FHA loans are still largely misunderstood. The facts regarding FHA loans were provided in part by FHA Pros, LLC, a national FHA condo approval service.
* FHA Loans Are Not Only For Low Income Borrowers. FHA loans are available to everyone, with no maximum income restriction. Borrowers do need to submit income and asset verification documentation.
* FHA Loans Are Not Only For First-Time Buyers.
* FHA Loans Are Available for Large Loans. The government recently raised the maximum loan amount from its original cap of $362,790 to $793,750 as a way to help stabilize the housing market.
* FHA Loans Are Not Affiliated With The Section 8 Housing Program. While both programs are administered by the U.S. Department of Housing and Urban Development (HUD), FHA loans have nothing to do with low-income subsidized housing.
* FHA Loans Are Often More Affordable Than Conventional Loans. FHA loans generally provide the same interest rates as conventional loans, however borrowers benefit from lower down payment requirements starting at 3.5 percent.
* FHA-Approved Condo Developments Are More Desirable To Buyers. Loans will not be issued on properties in condo developments that are not FHA approved. The development must apply to HUD to be FHA approved.
* FHA Loans Are Assumable. In addition to lower down-payment and credit-qualifying requirements as compared to conventional loans, FHA loans are assumable, making a porperty attractive for resale especially if interest rates have risen from time of purchase until time of sale.
True Real Estate advises its clients that obtaining loans, especially on condominiums, can be a complex process and should be approached with as much knowledge as possible. Contact a True Real Estate professional today for more information.